The crucial part of the deal will be securing approval from the Insurance Regulatory Development Authority (IRDA), which is monitoring the implications for ING Vysya Life.

Last month, ING Group became the first foreign firm to increase its stake in an Indian bank under newly increased foreign direct investment FDI limits. ING proposed to purchase a 24% stake for Rs3.40 billion from Indian conglomerate GMR Group in Vysya Bank at Rs626.92 per share. ING already has a 20% stake in Vysya Bank through its subsidiary, Bank Brussels Lambert BBL.

The deal marks the largest foreign direct investment in an Indian bank following the decision by...